Chapter 2
What Is the Forex Market?
In This Chapter
Getting inside the forex market
Understanding that speculating is the name of the game
Trading currencies around the world
Linking other financial markets to currencies
Getting a feel for currency trading with a practice account
We like to think of it as the Big Kahuna of financial markets. The foreign exchange market — most often called the forex market, or simply the FX market — is the largest and most liquid of all international financial markets. (See the “Getting liquid without getting soaked” section, later in this chapter, for our discussion of liquidity.)
The forex market is the crossroads for international capital, the intersection through which global commercial and investment flows have to move. International trade flows, such as when a Swiss electronics company purchases Japanese-made components, were the original basis for the development of the forex markets.
Today, however, global financial and investment flows dominate ...
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